Report: AR Will ‘For The Foreseeable Future’ Dominate VR

Digi-Capital announced this week that it is revising its forecasts for the augmented reality (AR) and virtual reality (VR) markets due to the sudden and likely massive user base that AR is about to inherit. Spearheaded by the likes of Google’s ARCore, Apple’s ARKit, and Facebook’s Camera Effects, AR is now expected to see a sudden and almost immediate user base growth spurt which will result in VR trailing in number terms, significantly.

For example, Digi-Capital suggests that by the end of 2018 the combined efforts of Google, Apple, and Facebook could see more than 900 million users having access to AR content. A number that Digi-Capital further suggests could reach as much as 3 billion by 2021. To put this into perspective, the combined efforts of VR within the same time-frame is not expected to head very far north of 100 million users. This has further led to Digi-Capital making a number of specific predictions, such as not only will mobile AR remain dominant over VR “for the foreseeable future,” but also that the sudden emergence of AR will have a negative impact on the market potential of VR going forward. Something which in turn will slow the growth and adoption of VR, and in no small part due to phone makers and developers having had their attention caught by the benefits of AR.

However, in spite of the clear suggestions that AR is not only now here, but will be the dominant force within the AR/VR sector (and especially mobile AR), Digi-Capital does highlight that when it comes to revenue, things are less clear. For example, while Digi-Capital expects the AR user base to be close to 3 billion (compared to the 100 million for VR) by 2021, within the same time-frame Digi-Capital only expects AR to occupy two-thirds of the overall AR/VR market revenue. Part of the reason for this is due to the low average revenue per user (APRU) of AR, compared to the ability of VR to generate greater APRU returns through the selling of hardware, as well as software. In either case and regardless of how exactly the market unfolds, one of the now-expected big winners to emerge from the combined AR and VR world is the eCommerce sector, with the likes of Amazon, eBay and Alibaba specifically name-dropped as ones who will do well and will further solidify their “dominant positions.” For a more detailed look at these latest projections and forecasts the full ‘Augmented/Virtual Reality Report Q4 2017’ is available to download from Digi-Capital.